Marathon Petroleum Corp. to buy Andeavor, creating national reach

Published on May 01, 2018 by Kevin Randolph

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Marathon Petroleum Corp. (MPC) will buy Andeavor (ANDV) for more than $23 billion, the companies announced on Monday, creating the No. 1 U.S. oil refiner by capacity and a top-five refiner globally.

The combined company will have more than 3 million barrels per day in capacity, with Andeavor’s refineries in California, the Mid-Continent and the Pacific Northwest complementing MPC’s existing Gulf Coast and Midwest refining footprint. The companies said the merger will create a national portfolio, vastly improved efficiencies and a better ability to serve customers.

Findlay, Ohio-based MPC is the nation’s second-largest refiner, with a crude oil refining capacity of approximately 1.9 million barrels per day in its six-refinery system, the company said. Marathon brand gasoline is sold through approximately 5,600 independently owned retail outlets and its Speedway unit owns and operates the nation’s second-largest convenience store chain.

Andeavor, based in San Antonio, Texas, operates 10 refineries with a combined capacity of approximately 1.2 million barrels per day.

“This transaction combines two strong, complementary companies to create a leading U.S. refining, marketing, and midstream company, building a platform that is well-positioned for long-term growth and shareholder value creation,” MPC Chair and CEO Gary Heminger said.

The transaction is expected to close in the second half of 2018, subject to regulatory and other customary closing conditions, including approvals from MPC and ANDV shareholders. The headquarters will be located in Findlay and the combined business will maintain an office in San Antonio.

At closing, Marathon’s Heminger will be chief executive and ANDV Chair and CEO Greg Goff will join MPC as executive vice chairman.

“With significantly increased scale, a strong platform for our midstream businesses and a leading nationwide retail and marketing distribution portfolio, the combined company presents tremendous value enhancement and growth opportunities for all shareholders,” Goff said. “This strategic combination provides our shareholders with a premium for their shares and the opportunity to benefit from substantial future value creation at MPC.”